EUR/USD could experience a dip before rising further – Nordea

EUR/USD moved from a top of around 1.11 at the start of May down to 1.06, only to rise sharply over the past two weeks up to 1.09. Economists at Nordea discuss the pair’s outlook.

EUR/USD to correct down to the 1.07 area over the summer
While we have a higher profile for EUR/USD down the road, we believe markets are too pessimistic on behalf of the USD and see the cross correction down to the 1.07 area over the summer.

The cross will likely trade in the 1.06-1.10 area over the coming months before rising higher next year when it becomes clear that the Fed’s tight monetary policy is having a sufficient drag on inflation and the economy.